Generally, in the financial industry, a ‘rate exception’ refers to a rate (e.g. interest rate, etc.) that is different from a board or standard rate normally offered by a financial institution. Financial institutions often offer customers rate exceptions for savings, investment, or credit accounts based on their relationship with the financial institution and/or a desire to attract new customers. In many instances, customer service representatives or financial institution employees often have the authority to make such a determination in real time by examining the customer's past dealings with the financial institution, and the current market for similar products. Alternatively, a financial institution may refer a rate exception request to a specialized department or group. However, this often leads to inconsistent proposals, or unnecessary delay in proposing a rate exception.
The ability to make quick, consistent, and convenient decisions is of high monetary significance for financial institutions. In addition, the ability to provide consistent decisions to customers can increase customer confidence, and eliminate rate shopping within the same financial institution. This has been difficult in the past, because the value of financial products is largely dependent on the location of the customer and/or the financial institution.
The value of financial products can vary significantly from one location to the next. In addition, each customer service representative or financial institution employee may evaluate the customer's relationship with the financial institution and the relevant market differently. Unfortunately, conventional techniques of handling rate exceptions do not account for the competitive market, and are prone to human error and subjectivity.